Arvind Fashions, retailer of various brands such as Gap, US Polo, Sephora, Aeropostale and Flying Machine. It has held payments of 50-80% of staff salaries for April owing to reduced sales. And depleting cash flow amid the lockdown forced by CoronaVirus (Covid-19). Salary payments may be impacted with delay for a few more months until the situation improves.
Arvind Fashions has currently made an payment on account salaries. And this is for the month of April to support employees to take care of their immediate requirements said by CEO J Suresh. He said that April was zero sales month, and the reason we are paying the advance. We will be able to pay the balance when the situation improves and things become normal.
As per information available, employees getting a monthly salary of Rs 15,000 will be entitled to get Rs 8,000 for April. Where as employees drawing salaries of Rs 3-5 lakh will get Rs 75,000 or 20% of net pay, whichever is higher. Similarly, salaries of top management have been slashed by 80% and capped at Rs 1.25 lakh for the month.
The move to hold salary payments comes at a time when most bricks-and-mortar retailers are struggling with low sales. And mounting inventory even as their fixed costs are remain unchanged. This may take six to nine months to regularised, said an executive.
Indian Apparel founds that Retail has been one of the hardest hit sectors due to the Covid-19 spread as stores have been shut due to the lockdown. It began on March 25 and has been extended thrice so far. The Retailers Association of India has predicted about six million jobs losses in the retail sector. This may be in the coming months due to the CoronaVirus impact.
Recently, Arvind Fashions had posted a net loss of Rs 191 crore for the nine months to December 2019. And it is yet to announce its fourth quarter earnings.
Over the months, the Bengaluru-based company pruned its international brands portfolio and exited four global labels – Gant, Nautica, Izod and Elle – even as it resized outlets for Gap and Aeropostale and shuttered multiple “unviable” outlets of its Unlimited-branded department chain.
